Builders May Help Pay Debt On Grant

July 18, 1985|By Donna O'Neal of The Sentinel Staff

KISSIMMEE — Bowing to persistent pressure from Osceola Square Mall developer Norman Rossman, city officials have agreed to ask developers of neighboring projects to help pay $177,700 Rossman owes to fulfill obligations he made to land a federal grant.

It has been a long and somewhat complicated negotiation in which the city -- faced with an impending deadline -- reversed its position after repeated pleas from Rossman and his attorney.

If after a public hearing scheduled within 30 days the city decides not to assess the owners, Rossman still will have to pay the difference as he agreed, the commission decided in a 4 to 0 vote Tuesday night. Commissioner Ken Maher was out of town.

Commissioner Jimmy Wells questioned the way the city reached its decision but said the city had left itself few options.

''We're being manhandled by a developer,'' he said. ''I would have liked to have held his feet to the fire, but it's like the typical position we get into. We're a crisis-management organization where everything is down to the wire. Decisions that are made like that are generally not the wisest ones.

''We were going to be mired in a lot of problems and the possibility of losing the grant if we didn't do it this way.''

The developments are in or adjacent to an area bounded by Airport Road on the west, Dyer Street on the east, Vine Street on the south and Columbia Avenue on the north. City officials estimate about five property owners, in addition to Rossman, are involved.

It began last year when the city obtained the $749,885 jobs bill grant awarded by the Department of Community Affairs to help build streets, water and sewer lines and install traffic lights at the mall site. In return, Rossman agreed to guarantee that the shopping center's stores would provide 51 percent of their jobs to people with low and moderate incomes.

However, some of the grant went for administrative costs, so only $596,600 is left for construction. That was $207,700 below the $804,300 low bid, submitted by Tonn and Blan Inc. of Michigan City, Ind. That company also is the contractor for Rossman's project.

Under terms of a developmental order from the city, Rossman agreed to pick up any construction cost overruns.

As an alternative, the city and Rossman could reduce the scope of the work, contingent upon the DCA's approval.

In June, after Rossman learned the amount of the overrun, he asked the city to scale down the project or assess adjacent property owners. The city got a July 21 extension on the bid -- which delayed the project -- to consider Rossman's request.

However, commissioners voted June 20 to make him pay the difference, as he had agreed.

Rossman's portion of the cost was decreased somewhat when the state Department of Transportation agreed to pay for a $30,000 traffic light at Armstrong Road and Vine Street, site of the mall and the adjacent properties. That agreement came because Vine is a state highway and the DOT is involved in widening the street next year.

After the city ordered him to pay, Rossman refused to put up the money. Commissioners had to act on the bid Tuesday, the last city commission meeting before the bid expired. Commissioners were reluctant to accept the bid without first getting Rossman's money.

At Tuesday's meeting, Rossman again asked to have adjacent property owners help pay the shortfall. Planning director Dennis Foltz warned commissioners that any further delays could jeopardize the grant. Foltz added that the DCA also wanted all the improvements completed.

Doug Lees, DCA community redevelopment administrator, said Monday his agency ''is under a lot of pressure from the feds to get these monies out and spent as soon as possible.'' He added that the grant's purpose was to create jobs. ''We wouldn't be that agreeable to anything that would change that,'' including a change in the project's scope.

After hearing Foltz' warnings, the commission decided to grant Rossman's request and accept the bid. Commissioners told Rossman to produce by Monday a letter from Tonn and Blank saying that company will look to Rossman for the $177,000 instead of to the city.

Meanwhile, city officials have begun rounding up the adjacent property owners to assess. They include:

-- Investments International Development Corp. of Kissimmee, developer of Sun Plaza shopping center.

At least one developer contacted said he is against the assessment and would not benefit from the improvements. William McMullan, owner of Sun Plaza, said the access to his shopping center will be from Vine and Dyer, so he should not have to pay for improvements to Columbia or for the construction of Armstrong Avenue between Airport and Dyer.

However, Wells disagrees. ''Even if they don't have any access planned, the improvements are going to enhance the value of the other properties.''

Commissioner Bruce Van Meter agreed. ''I don't think we're favoring one developer over another,'' he said. ''They're all developing that area, they're all going to impact on that area.''